AGRICULTURAL MANAGEMENT, MARKETING AND FINANCE WORKING DOCUMENT 15

The food supply and distribution system of Tirana, Albania

AGRICULTURAL MANAGEMENT, MARKETING AND FINANCE WORKING DOCUMENT 15

The food supply and distribution system of Tirana, Albania

by Arben Verçuni and Edvin Zhllima

Agricultural Management, Marketing and Finance Service (AGSF) Rural Infrastructure and Agro-Industries Division FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2008 The views expressed in this publication are those of the author(s) and do not necessarily reflect the views of the Food and Agriculture Organization of the United Nations.

The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned.

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Contents

LIST OF TABLES, FIGURES, MAPS AND BOXES iv

ABBREVIATIONS AND ACRONYMS vii

EXECUTIVE SUMMARY ix

1. INTRODUCTION 1 1.1 WHAT IS A FOOD SUPPLY AND DISTRIBUTION SYSTEM? 1 1.2 THE CITY OF TIRANA 1 1.3 THE TIRANA REGION 4

2. THE SOCIO-ECONOMIC, INSTITUTIONAL AND LEGISLATIVE CONTEXT 7 2.1 POVERTY 7 2.2 THE LABOUR MARKET 8 2.3 TRANSPORTATION 10 2.4 WASTE MANAGEMENT 11 2.5 INFRASTRUCTURE 12 2.6 THE POLITICAL AND MACROECONOMIC CONTEXT 12 2.7 THE INSTITUTIONAL CONTEXT 13

3. URBAN FOOD DEMAND, FOOD INSECURITY, AND FOOD SUPPLY AND DISTRIBUTION SYSTEMS 15 3.1 URBAN FOOD DEMAND AND FOOD INSECURITY 15 3.2 FOOD SUPPLY SYSTEMS 18 3.3 URBAN FOOD DISTRIBUTION SYSTEMS 22

4. THE CITY AND THE FOOD SUPPLY AND DISTRIBUTION IN THE FUTURE 33 4.1 THE CITY IN TEN YEARS 33 4.2 THE STATUS QUO SCENARIO 33 4.3 THE DESIRABLE SCENARIO 35

5. CONCLUSIONS 37

REFERENCES 39

ANNEX 41 iv List of tables, figures, maps and boxes

LIST OF TABLES 1. OVERVIEW OF THE CITY OF TIRANA 1 2. UNEMPLOYMENT IN THE TIRANA REGION 9 3. UNEMPLOYMENT IN THE CITY OF TIRANA IN 1990 (IN PERCENTAGES) 9 4. EMPLOYMENT IN THE CITY OF TIRANA (IN PERCENTAGES) 10 5. MAJOR MEANS OF TRANSPORTATION IN THE CITY OF TIRANA (IN PERCENTAGES) 10 6. ANNUAL HOUSEHOLD CONSUMPTION EXPENDITURES, 1993, 1994, 2000 (IN PERCENTAGES) 15 7. COMPOSITION OF THE HOUSEHOLD BUDGET ACCORDING TO THE HEAD OF HOUSEHOLD CATEGORY (IN PERCENTAGES) 16 8. ANNUAL TRENDS IN PRODUCT SUPPLY PER CAPITA IN ALBANIA, 1965–2002 (GRAMS/DAY) 17 9. HOUSEHOLD BUDGET 18 10. PRODUCTION, CONSUMPTION AND FOOD BALANCE IN THE CITY OF TIRANA 19 11. PRICES AND MARGINS OF THE MAIN FOOD PRODUCTS IN WHOLESALE AND RETAIL MARKETS, 2004 20 12. DIFFERENT TAXATION LEVELS, 2005 30

LIST OF TABLES IN ANNEX 13. PEOPLE INTERVIEWED 41 14. DATA ON THE TIRANA REGION 42 15. POVERTY AND INEQUALITY INDICATORS IN THE TIRANA REGION 43 16. MAIN ECONOMIC DATA, 1998-2004 44 17. POVERTY INDICATORS IN ALBANIA, 1998, 2002, 2003 44 18. MAIN AGROFOOD PRODUCTION, 2000–2004 45 19. PRODUCTION OF FRUITS PER CAPITA, 2003–2004 45 20. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE PROCESSED FRUITS AND VEGETABLES SUBSECTOR, 2000–2003 (IN KG) 46 21. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE FLOUR SUBSECTOR, 2000–2003 (IN KG) 46 22. SUPPLY LEVEL, PRODUCTION AND IMPORTS/EXPORTS FOR THE OIL SUBSECTOR, 2000–2003 (IN KG) 46 23. SUPPLY LEVEL, PRODUCTION, AND IMPORTS/EXPORTS FOR THE SOFT DRINKS AND FRUIT JUICE SUB-SECTOR, 2000–2003 (IN LITRES) 46 24. DOMESTIC PRODUCTION OF AGRO-INDUSTRY AND MEAT SUBSECTOR (IN MILLION ALL) 47 25. FRESH MEAT PRODUCTION (IN TONNES) 47 26. PRODUCTION PRICE LEVELS, 2002, 2003, 2004 (IN ALL/KG) 47 27. PRODUCTION PRICE LEVELS FOR FOOD PROCESSED PRODUCTS (IN ALL), 2002–2003 AND THEIR VARIATION (BASE YEAR 2002) 48

LIST OF FIGURES 1. PRICE LEVELS FOR TOMATOES, PEPPERS AND GRAPES IN DIFFERENT MONTHS OF 2004 21 2. MARKETING CHANNELS 23 3. THE DYNAMICS OF THE TIRANA POPULATION, 2001–2016 33

LIST OF MAPS 1. DISTRIBUTION OF NEW HOUSING AMONG TIRANA MINI-MUNICIPALITIES 2 The food supply and distribution system of Tirana, Albania 

2. POPULATION DISTRIBUTION BY MINI-MUNICIPALITIES OF TIRANA 3 3. THE RING ROAD OF TIRANA 3 4. THE CITY OF TIRANA AND THE TIRANA REGION 4 5. POVERTY AND INEQUALITY IN THE TIRANA MINI-MUNICIPALITIES (IN PERCENTAGES) 8 6. THE PUBLIC RETAIL MARKET DISTRIBUTION IN THE CITY OF TIRANA 25 7. THE PUBLIC WHOLESALE MARKET DISTRIBUTION IN THE CITY OF TIRANA 28 8. SLAUGHTERHOUSE DISTRIBUTION IN THE CITY OF TIRANA 29

LIST OF BOXES 1. CONSUMER PROTECTION ASSOCIATION 22 2. ASTRIT, TRADER, 45 YEARS OLD 26 3. ZANA, HOUSEWIFE, 42 YEARS OLD 26 4. PETRIT, WHOLESALER, 40 YEARS OLD 28 5. NARDI, STREET VENDOR, 35 YEARS OLD 30

The food supply and distribution system of Tirana, Albania vii

Abbreviations and acronyms

ACIT Albanian Centre for International Trade ALL Lek (Albanian Currency) EU European Union FAO Food and Agriculture Organization of the United Nations FNAP Food and Nutrition Action Plan FSDS Food Supply and Distribution System GDP Gross Domestic Product GTZ German International Cooperation Agency INSTAT Institute of Statistics KM Kilometre LSMS Living Standards Measurement Survey MAFCP Ministry of Agriculture, Food and Consumer Protection MDG Millennium Development Goals MOE Ministry of Economy MOF Ministry of Finance MOH Ministry of Health NSSED National Strategy for Socio-Economic Development SAR Stabilization and Association Report UNICEF United Nations Children’s Fund WHO World Health Organization

The food supply and distribution system of Tirana, Albania ix

Executive summary

Metropolitan Tirana has experienced a drastic demographic change caused primarily by internal migratory flows. The demographic growth in Tirana has led to urban expansion and loss of productive land to the point that the regional food balance is now negative. An analysis of poverty distribution shows that urban areas have lower poverty levels and higher consumption rates per capita than rural areas. Tirana also has the highest socio-economic inequality rate: poverty levels average around 18 percent of the city population, vary considerably and are higher in the suburban mini-municipalities. The poor in Tirana are food-insecure. In 2005 the population of Tirana consumed 215 151 tonnes of food and is expected to consume 282 783 tonnes by 2016. The population is expected to reach 528 750 by 2016.

This report discusses a number of problems encountered in the effective management of food supply and distribution systems (FSDSs):

• City supply and distribution channels are characterized by fragmentation and confusion regarding role specialization. • Consumers appear to be demanding higher standards of service in the food market (55 percent think that they have inappropriate market facilities and 68 percent see street selling as a problematic issue). • There are 15 public markets in Tirana, although only 70 percent of this surface is currently exploitable, only 50 percent of the capacity is exploited in the meat market. • Transport infrastructure near markets is also poor and is likely to deteriorate as food demand increases. • Hygiene and maintenance conditions vary from market to market, but are generally poor. • Sixty percent of fruits and vegetables sold year-round are imported from other countries, while rural areas of the Tirana district contribute only seven percent of the total supply. • The lack of a medium-term regulatory plan for Tirana adds confusion to the markets’ organization.

Some steps have been taken to address these market problems and growing demands. For example, in 2004, ALL2 456 million (US$24 560 000) were allocated by the municipality for public investments (the largest allocation in the last four years) in transportation and market improvement and upkeep.

The purpose of this document is to recommend other ways of improving the market system:

• Setting up and opening markets will obviously require involvement of public funds and/ or powerful donors. Investments in already established markets should be aimed at re-planning location and redesigning offered service mixes,and upgrading necessary infrastructure. Increased efficiency of the market system will create opportunities for eliminating the abusive and speculative component of marketing margins, thus allowing for a reduction of retail prices; if costs are lower, lower margins will be needed to cover them. • Suburban ‘informal’ areas should be legalized and become attractive locations to establish markets and slaughterhouses. Central and local governments would lead programmes aimed at supply regulation and would work together in developing local capacities.  Executive summary

• Municipality staff should urgently be given some guidelines on effective management of the markets. • Foodstuffs wholesale markets and fruit and vegetable wholesale markets should be in different locations and well distributed throughout the city – both of which are not the case at present – in order to allow better planning of public retail markets, which get their supplies from wholesalers. • Meeting the increased food demand of the urban population will be problematic if links between rural and urban areas are not strengthened. • Special attention should also be paid to the establishment of other local markets and collection infrastructure, which would improve the overall efficiency of the market system. • Currently there is only one wholesale market for fruits and vegetables in Tirana, the Dinamo wholesale market. This market cannot adequately face food flows coming into the capital city. Upgrading and modernizing this and future markets is vital for future demographic growth, otherwise the growing needs of Tirana will be satisfied by informal markets that emerge spontaneously around the city.

If the central government does not show any special interest in investing in market infrastructure improvements, in ten years the capital city’s market will be in the hands of imported goods and rural areas will see their unsold products go to waste.

This document will discuss the food supply to cities subsystem, which includes all the activities required to produce food and bring it to cities: production (including urban food production), imports, processing, storage, assembling, handling, packaging and transport, etc. Also discussed is the urban food distribution subsystem, which includes all the formal, informal, traditional and modern activities that are required to distribute food within the urban area: wholesale, intra-urban transport, retailing, street food, restaurants, etc. The document will also examine the institutional framework, waste management, and urban food demand and food security in Tirana. The food supply and distribution system of Tirana, Albania 

1. Introduction

1.1 WHAT IS A FOOD SUPPLY AND DISTRIBUTION SYSTEM?

FSDSs to cities are complex combinations of activities, functions and relations – production, handling, storage, transporting, processing, packaging, wholesaling, retailing – enabling urban areas to meet their food needs. Activities are performed by different economic agents, including producers, assemblers, importers, transporters, wholesalers, retailers, processors, street vendors, service providers, packaging suppliers, public institutions, and civil society organizations (FAO, 2001).

Dynamic and efficient FSDSs have a direct impact on living standards and on the quality of life. The various functions performed by a FSDS can be grouped into two subsystems:

• the food supply to cities subsystem, which includes all the activities required to produce food and bring it to cities: production (including urban food production), imports, processing, storage, assembling, handling, packaging and transport; • the urban food distribution subsystem, which includes all the formal, informal, traditional and modern activities required to distribute food within the urban area: wholesale, intra-urban transport, retailing, street food and restaurants, etc. (FAO, 2001).

While previous research focused on parts of the FSDS of Tirana, this study attempts to undertake a comprehensive analysis of the FSDS, using a systemic approach.

1.2 THE CITY OF TIRANA

Tirana, the capital city of Albania, is situated in the centre of the country, at only 40 kilometres (km) from Durrës, the largest port in the country, and 26 km from Mother Theresa Airport, the country’s only civil airport. Table 1 presents some facts on the capital city.

Table 1. Overview of the city of Tirana

City’s total surface area (km2) 41.8 Tirana Region’s total surface area (percentage) 4.0 Population (2005) 402 290.0 Tirana Region’s total population (percentage) 54.0 On Albania’s total population (percentage) 13.0 Population density (persons/km2) 9 624.0 Tirana’s population density compared with Albania’s average 80 times higher No. of households 105 876.0 National total (percentage) 12.3  Introduction

Tirana has experienced a drastic demographic change caused primarily by internal migratory flows. The population increased by 43.4 percent between 1989 and 2001; up to 51 percent of the capital city’s housing was built between 1991 and 2001. In Map 1, the dark areas show high levels of new housing built after 1991.

Map 1. Distribution of new housing among Tirana mini-municipalities

Source: INSTAT, 2001

Demographic growth has been both a cause and a consequence of uncontrolled urban development, which has been characterized by the chaotic building of housing (including illegal housing) in the suburbs. In these newly populated areas, referred to as informal areas, roads, water and electricity supply and sewage systems are in poor condition. The same is true for markets, processing and storage facilities and transport infrastructure, which are all required to carry out food supply and distribution activities. Since typical food outlets are often small and inconveniently located, consumers have to invest time and money to reach the shops and bring food back home.

Map 2 shows the distribution of Tirana’s population in 2001 and its concentration in mini- municipalities situated in the central part of Tirana, particularly within the ring road. The ring road is the circular road shown in map 3, which ideally delimits the city’s core.

Many households living in the ‘informal areas’ get their food from:

• their own family gardens and plots; • farm activity in their rural place of origin; • local retail outlets.

For most of these households, access to food has deteriorated because of the financial constraints. The practice of buying food on credit from small retailers is widespread. The food supply and distribution system of Tirana, Albania 

Map 2. Population distribution by mini-municipalities of Tirana

Source: INSTAT, 2001

Map 3. The ring road of Tirana

Source: INSTAT, 2001  Introduction

1.3 THE TIRANA REGION

The Tirana region is divided into two districts: Tirana (which includes the city of Tirana proper) and the Kavajë district (see map 4). The region, one of the largest and most populated in Albania, is situated in the central part of the country and is considered the most developed area of the country. (See in the annex Table 14)

The Tirana district has three municipalities and 16 communes; the Kavajë district has two municipalities and eight communes.

Map 4. The city of Tirana and the Tirana region

Source: INSTAT, 2001

Tirana is the largest manufacturing, commercial and administrative centre of Albania. There are 20 152 active enterprises in the Tirana region compared to 51 945 countrywide, or 39 percent of the national total. Food processing is the most developed manufacturing sector in terms of contribution to gross domestic product (GDP) at the national level, followed by building materials and clothing. Some of the most important products include flavourings, cookies, sausages, dairy products, alcoholic beverages and edible oils. Both the trade and the services sector play an important role in employment generation. Trade of goods (45 percent) and services in bars/restaurants (10 percent) are important self-employment and family business alternatives. Agriculture serves as a self-employment alternative

 The population ���������������������������������������� density is 718 inhabitants/km2, and migration from other parts of the country is still growing.  Communes and municipalities are the first level of local government and regions form the second level. All these bodies are run by councils. Members of communal and municipal councils are elected directly by citizens, whereas those of regional councils are elected by the representatives of communal and municipal councils of the region. The mayors and the chairs of communal councils are mandatory members of their region’s councils. A law passed in 2000 gave regional councils special functions in local activity planning and harmonization, and distribution of public services, which may be delegated to them by the central government. Communes are mainly rural, but also include parts of urban outskirts. The administrative division in communes and municipalities have been based on population and on other socio-economic factors, but as these have grown over time, the administrative division of the country requires modification.  About 35 percent of manufacturing companies, 32 percent of construction companies, 45 percent of services companies and 40 percent of trade companies of Albania are located in the Tirana prefecture. The food supply and distribution system of Tirana, Albania 

for most of the rural population (26 percent of the active population in the Tirana region). Also, it partly supplies local and national markets and food service outlets in the region. Livestock rearing is an important activity and is primarily based on cattle, sheep and poultry; pigs and goats have a less important role.

The food supply and distribution system of Tirana, Albania 

2. The socio-economic, institutional and legislative context

2.1 POVERTY

The situation in the Tirana region

The analysis of poverty distribution shows that urban areas have lower poverty levels and higher consumption rates per capita than rural areas. Tirana also shows the highest inequality rate in Albania, its Gini coefficient being 29.5 percent (see in the Annex Table 15). The average poor household consists of a family with more than five members, low education levels and low employment rates. The unemployment rate in poor families is almost twice that of better-off families.

Living and working conditions are the toughest in the poorer and more remote communes such as Vaqarr, Shëngjergj, Baldushk and Zall-Herr, where income-generation capacity is limited by insufficient production, processing and marketing skills and facilities. A potential source of income may be the improved production of typical food, intended as a niche product, whose importance should be further emphasized.

Communes situated in flat areas such as Ndroq and Kashar – located along the roads connecting Tirana with Durrës and Kavajë, to the north and southwest respectively – have better access to markets, because of better communication and transport infrastructure. In these communes, off-farm activities are far more common than in other, more remote areas, and their high productivity enables workers to generate greater incomes.

The situation in the city of Tirana

Tirana shows marked social-economic inequalities. About 18 percent of the city population lives in poverty. Poverty levels vary considerably and are higher in the suburban mini-municipalities. Evidence shows that most people who run businesses are above the poverty line, whereas those that rely on wages suffer the most from poverty. Migrants also make up a large part of the poor population.

Many state-owned enterprises collapsed in the early 1990s, and the workers who lost their jobs then are still in poor living conditions, with no security and stablity.

The official poverty line in Albania is set at ALL4 891 a month. However, since price levels in Tirana

 Referring to the 2002 Living Standards Measurement Survey (LSMS) (INSTAT and World Bank, 2002), most of the households in Albania live on income generated from work (approximately 41 percent). Private transfers to urban areas, namely, remittances and humanitarian aid, account for 6 percent of the income, whereas the percentage reaches about 11 percent for rural areas. Public transfers, such as economic assistance, pensions and unemployment benefits, are estimated to make up 11 percent of the households’ income in urban areas and for 10 percent of the households’ income in rural areas. Income from property transfers, businesses or other assets accounts for 36 percent of the households’ income in urban areas and 10 percent in rural areas. Evidence shows that most people who run businesses are above the poverty line, whereas those that rely on wages suffer the most from poverty.  See in the Annex Table 17 for more information on poverty levels in Albania. Approximately 25 percent of the Albanian population is considered poor, i.e. their income lies below ALL4 891 per capita per month. Five percent of the population is considered ‘extremely poor’, having an income below ALL3 471 per capita per month. If the poverty line were increased by ten percent, then approximately 50 percent of the population would drop below it and thus be considered poor.  The socio-economic, institutional and legislative context

are higher than in other towns and areas of the country, households in Tirana could well be over the official poverty line but still have a hard time satisfying their basic needs.

Map 5. Poverty and inequality in the Tirana mini-municipalities (in percentage)

Source: INSTAT and World Bank, 2002.

In order to reduce poverty, in 2004 the Tirana municipality provided economic assistance to 3 529 disabled people and to 508 caregivers living in Tirana. Additionally, 6 468 families received ALL3 310 each month in economic assistance. This was not adequate, however, especially when considering that bread alone – a staple food in Albania – may cost a family in this category ALL1 800 per month.

In spite of these forms of assistance, it has become more difficult for the poor, the unemployed and retired people to access food. Most of the poor are elderly people with greater needs for medicine. Pensions and social security payments are small, and drugs and medical prescriptions are not covered. Many of the poor are indebted to shopkeepers or get meals in centres established by religious or charity institutions.

2.2 THE LABOUR MARKET

The Tirana region

The labour market in the Tirana region is characterized by gender- and age-related inequalities. Women only account for 38 percent of the working force, with little difference between rural and urban areas. The food supply and distribution system of Tirana, Albania 

Table 2. Unemployment in the Tirana region

Total unemployment Rural Urban Total population 24.18 19.00 42.00 Male 19.5% 18.0% 19.0% Female 30.8% 21.0% 35.0% Source: INSTAT, 2001

Clearly, the unemployment level in urban areas is higher than in rural areas. On the other hand, rural areas are more easily affected by hidden unemployment, which is facilitated by the small size of farms and the high degree of agricultural seasonality. In any case, the influx of working force from neighbouring villages into the capital city has considerably increased the unemployment rate in the city of Tirana.

City of Tirana

Determining the employment or unemployment rate in the city of Tirana is very complex since any comprehensive analysis must take into consideration the following:

• formality or informality of the working force (whether or not workers are registered as employed); • utilization or non-utilization of unemployment/employment services; • working force mobility from one job to another; • the working force inflow into the city.

According to administrative data provided by employment offices, the unemployment rate in the city of Tirana is seven percent. Significantly, the civic network for information provides a higher figure, showing how official data is commonly unreliable in Albania.

Table 3 provides data from the 2002 Living Standards Measurement Survey (LSMS).

Table 3. Unemployment in the city of Tirana in 1990 (in percentages)

Unemployment rate Total 20.0 Male 18.9 Female 22.2 Source: INSTAT and World Bank, 2002

With regard to the employment rate, Table 4 shows the big gap between male and female employment, largely because many women abandoned the labour market in the 1990s in order to devote themselves to housekeeping. In recent years, however, women are returning, so the gap will decrease in the future. 10 The socio-economic, institutional and legislative context

Table 4. Employment in the city of Tirana (in percentages)

Employment rate Total 38.2 Male 52.0 Female 26.0 Source: INSTAT and World Bank, 2002.

In the city of Tirana, 85 percent of the working force is wage/salary-dependent; only 15 percent is self-employed (family businesses included).

2.3 TRANSPORTATION

Public and private transport in the capital city represents a complex issue, largely because of the rapid demographic growth, the constant increase in the number of vehicles, and the poor road conditions. As shown in Table 5, the population of Tirana uses a variety of means of transportation. During 2004, the regional directorate of Tirana registered as many as 13 382 vehicles.

Table 5. Major means of transportation in the city of Tirana (in percentages)

Means To reach the workplace Leisure On foot 41.0 52.3 Public transportation 38.7 33.4 Private vehicle 26.0 21.8 Bicycle 5.9 4.5 Motorcycle 2.7 2.8 Source: Co-PLAN, 2002

The municipality of Tirana manages 160 km of roads, which include 258 road axes. There are 140 km of paved roads and 20 km of unpaved roads. These figures do not include unnamed roads and driveways.

A variety of vehicles, either privately owned or hired from third parties, are used for food transportation:

• large trucks used for bringing food into the city of Tirana, mostly from neighbouring countries or from Durrës port; • medium-size vehicles usually used for bringing food into the city of Tirana from other areas of Albania or for transportation within the capital city; • small vehicles or even automobiles used for food transportation inside the capital city.

Railways are almost all out of business in Albania, so food does not reach Tirana by train, except for a marginal part brought in by farmers who go to Tirana to sell their own produce.

Recently, after many years of total neglect from former administrations, the current municipal administration has invested considerably in infrastructure improvement by widening, fixing and modernizing roads. This was possible because of an increase in available funds, mainly because of improved tax collection and a stronger focus on the issue by the central government. The food supply and distribution system of Tirana, Albania 11

Nevertheless, there is still an unmet and increasing demand for infrastructural improvement (concerning mainly secondary and suburban roads), which suffer from a low ranking in the government’s priorities and therefore receives little funding. In spite of radical road improvement, according to surveys conducted by the municipality (Tirana Municipality, 2004a), 24 percent of the residents consider the roads in their neighbourhood to be inadequate.

The road network is based on the ring road (see Map 3 ), whose key points in Elbasani street, Vasil Shanto, 21 Dhjetori, Zogu i Zi, Stacioni i trenit (railway station), Dinamo wholesale market and Medreseja are very congested and extremely polluted. Traffic jams are frequent, especially where the ring road intersects with main road axes such as those connecting Tirana with the important neighbouring cities of Durrës, Elbasan and Kavajë.

The lack of parking spaces only worsens the already troublesome traffic situation, adding confusion and blocking entry to markets. More than 80 percent of the people interviewed are concerned with this issue.

Given the many food outlets in the capital city, people do not usually need public transportation to reach the markets, but can easily walk. The situation is different for those who live in the informal areas, which are cut-off from the main retailing facilities; they use buses or automobiles to reach special markets. A newly opened supermarket at 12 km from the city of Tirana provides free bus transportation from the city to the supermarket.

There is a need to improve environmental protection standards in view of the expected population growth and the subsequent increase in food demand, the number of vehicles, and the quantity of garbage and organic waste from markets and slaughterhouses. Since it is impossible to widen roads, food wholesale markets and slaughterhouses must be relocated in suburban areas, near the city’s entrance points (again, refer to Map 3 ).

2.4 WASTE MANAGEMENT

During the past decade, garbage production in Tirana has doubled and is now 0.8 kg/day/person. Tirana produced 116 000 tonnes of waste, 22 percent of the country’s total. The amount of inert material in urban waste is about 12 percent. All the garbage resulting from trade activities ends up in containers, which are commonly used by both businesses and individuals. Garbage collection in the city of Tirana is managed by two private firms and a municipal company, Kuartalla, which is also in charge of removing debris resulting from demolishing of illegal constructions and provides cleaning services for Tirana suburbs. Garbage is removed with special vehicles and brought to the Sharra urban garbage deposit in the outskirts of Tirana. Sharra does not have a garbage treatment facility so all garbage from Tirana is simply burnt, causing pollution and great harm to the local population. Not surprisingly, Sharra is classified as an environmental hot spot by the Ministry of Environmental Protection.

Another alarming fact is that all organic matter resulting from market and slaughtering activities is discharged directly into the city’s sewage system, with no preliminary treatment – none of Tirana’s slaughterhouses have any organic matter treatment facility. In order to improve waste management and enforce discipline in the markets, new regulations have been introduced concerning 2 640 traders located in 18 roads. 12 The socio-economic, institutional and legislative context

However, regardless of the many improvements made, Tirana is not yet a clean city. One of the problems is that neither food traders nor citizens respect the regulations restricting waste garbage discharge in the late afternoon and early night hours. This regulation was introduced to allow the waste management companies to remove garbage from the city during the night, leaving it clean for the following day. As these rules are systematically ignored, the city’s bins are always full of garbage, becoming unmanageable. Fines are imposed on those who are caught discharging garbage in hours where it is not permitted, but monitoring is infrequent, so the problem is still far from being solved.

2.5 INFRASTRUCTURE

The only regulatory plan in force in Tirana dates back to 1989, but because of political, social and economic changes, they are outdated. A new regulatory plan is under preparation. In 2004, the municipality of Tirana carried out several partial urban studies on construction permit issuance and tried to regulate the chaotic development of a number of areas by ensuring the presence of public facilities such as schools. The municipality allocated ALL2 456 million for public investments (the largest allocation in the last four years) in transportation and market improvement and upkeep (Tirana municipality, 2004b). Further, 73 percent of construction investments were undertaken in suburban areas as part of a set of investments in recent years by the local government. Data on private investments related to FSDSs are not available.

2.6 THE POLITICAL AND MACROECONOMIC CONTEXT

By the late 1990s, several structural reforms were implemented in Albania, such as a banking sector reform, land reform and privatization. Almost all small- and medium-size enterprises were privatized and considerable progress was made in privatizing strategic sectors of the economy such as telecommunications.

Regulations on the financial sector and fundamental functions of the public sector were strengthened and the government approved a new law on bankruptcy and a deposit insurance scheme. Registration of fixed assets was established and progress has been made in developing the property market. Noticeable actions were taken in public administration: a general law on civil service was approved; a salary structure developed; a medium-term budget programme established; legal and judiciary capacities and accountability regulations strengthened and the anti-corruption plan of action in effect was revised.

During the last five years, Albania has experienced a good economic performance with an annual growth rate of over seven percent in most of the period, combined with low inflation rates of less than four percent. In the same period, both exports and imports have constantly increased (see in the Annex Table 16 for more information at the country level).

Nevertheless, both the sustainability of economic growth and the country’s capability to reduce poverty are being threatened by political instability and limited reform in some sectors. Albania’s economy still remains largely informal (30 percent of the economy, according to INSTAT, 2004b) and the business environment is not enabling. Corruption, organized crime, lack of the rule of law and the slow pace of reforms are all obstacles to the further development of the country, which affects both domestic and foreign investment. The food supply and distribution system of Tirana, Albania 13

2.7 THE INSTITUTIONAL CONTEXT

The institutional structure of FSDS consists of public, private and civic components.

The public component has undergone a series of legal and institutional reforms, the most important being decentralization. Decisions are made at the central and local level. The main programmes and institutions of central decision-making directly relating to FSDS are those incorporated into the Ministry of Agriculture, Food and Consumer Protection(MAFCP) – Marketing Directorate, the Quality Control and Food Inspection Directorate (Food Inspection Sector, Labelling and Counterfeiting Sector); the Ministry of Health (MOH) – Hygiene Directorate; the Ministry of Finance (MOF) – Tax and Taxation Directorate, Customs Directorate; and the Ministry of Economy(MOE) – Competition Directorate, Directorate for Stimulating Small and Medium Enterprises.

The main programmes and institutions of local decision-making are the municipality (Directorate of Territory Control, Directorate of Taxes and Markets Administration, Urban Directorate, etc.) and the mini-municipalities, which make a valuable contribution to the FSDS through their agricultural and rural infrastructure support programmes.

These institutions are responsible for planning, establishing and maintaining the market infrastructure. They work with the private sector to help develop its role in food trade, but this is hardly done in practice.

The private component is represented by regional chambers of commerce and business development associations. Chambers of commerce play a significant role in preparing laws and regulations on food trade activity. Also associations try to make their own contributions to the creation of the markets’ status. Unfortunately, in recent months, government activities concerning both the preparation and implementation of laws have suffered from the political changes that occurred in Albania.

Finally, consumer protection associations, organic agriculture associations and local development centres around and beyond Tirana, such as Lushnjë and Fier, form the civic component of the institutional structure of the FSDS.

Even though these institutions have generated programmes and sub-programmes that have partially influenced the FSDS, they have never developed a coordinated strategy or medium/long-term programme to involve all the components of the FSDS and approach the system as a whole. As a result, programmes developed by these institutions are partial since some of the components of the FSDS are not consulted or show no interest in participating.

No concrete and visionary plan for the future has been presented that would be immune to political change. Consequently, the FSDS lacks both a legal basis and a real development strategy for the future.

Governmental programmes such as the Green Strategy, the National Strategy for Social-Economic Development, the Rural Development Strategy, the Regional Strategy, as well as other sector strategies and national documents signed by the Albanian Government, such as the Stabilization and Association Report (SAR) and the Millennium Development Goals (MDG), have had a partial, if any, effect on the FSDS.

14 The socio-economic, institutional and legislative context

This municipality is also in charge of activities and initiatives related to the establishment or expansion of the FSDS, including:

• the planning and construction of markets on land that it administers; • the choice of space designed for trading activities; • logistics in partial urban plans; • the establishment of a physical regulatory frame for markets, i.e. regulating road construction, parking spaces, electricity and fire fighting services, security and expulsion of informal vendors.

With regard to long-term investments in important projects for the FSDS development, there have been no positive signs of cooperation (except for some consumers’ protection initiatives) between the municipality and central government institutions, chambers of commerce or other local funds interested in improving market infrastructure.

The legal framework is based on the following:

• Law, No. 7 941 of 1995, concerning food in general; • Law No. 9 308 of 2004, regarding veterinary service and the setting up of a veterinary inspectorate; • other laws, articles and standards introduced to comply with European Union (EU) requirements.

All the institutions in charge of implementing these laws must regulate the entire range of issues on production, processing, storage, distribution, control and marketing of foodstuff for human consumption. The aim is to protect consumers’ health and to ensure the implementation of sanitary/ veterinary instruments for products of animal origin and other foodstuffs.

Albania has developed a Food and Nutrition Action Plan (FNAP) for 2002–2007, under which different projects aim to improve nutrition and public health conditions.

A maternal and child health project implemented by the MOH with support from the United Nations Children’s fund (UNICEF), between 2001–2005, focused on infant feeding and caring practices, and on iron, folacin and micronutrient deficiencies, especially among young women (WHO, UNICEF and FAO, 2002).

Other projects aimed at:

• poverty alleviation; • rural and suburban infrastructure improvement; • protection of more vulnerable groups; • qualitative and quantitative improvements of the food supply for the urban population. The food supply and distribution system of Tirana, Albania 15

3. Urban food demand, food insecurity, and food supply and distribution systems

3.1 URBAN FOOD DEMAND AND FOOD INSECURITY

The Household Budget Surveys conducted in the city of Tirana in 1993, 1994 and 2002 show changes in expenditure distribution among different items of household consumption (see Table 6).

Table 6. Annual household consumption expenditures, 1993, 1994, 2000 (in percentages)

Patterns of expenditure 1993 1994 2000 Cereal products 17.0 12.9 8.9 Vegetables 9.1 10.2 6.2 Fruits 5.7 3.4 4.6 Meat and other animal products 11.1 11.7 11.3 Chicken and eggs 5.1 3.8 2.5 Fish 0.2 0.3 0.8 Milk and dairy products 11.7 12.3 7.8 Different products 6.8 7.7 4.8 Eating out (restaurants, fast-food restaurants, etc.) 0.2 0.5 4.7 Food products total 66.9 62.8 51.6 Beverages 3.4 3.8 3.3 Food and beverages total 70.3 66.6 54.9 Tobacco 1.8 2.0 2.9 Clothes and footwear 2.8 2.4 5.3 Rent and utilities 2.7 3.2 6.0 Interior home renovations 2.9 1.9 1.2 Furniture 2.5 3.3 1.1 Equipments 4.4 4.2 0.8 Maintenance 0.9 2.3 0.4 Health 0.9 0.9 2.6 Transportation 1.6 1.3 1.7 Automobile maintenance 2.0 5.3 4.5 Personal communications 1.2 0.6 1.7 Leisure 0.5 0.0 2.4 Education 0.5 0.4 2.5 Culture 3.7 4.0 5.4 Personal care 0.3 0.8 1.9 Jewellery 0.1 0.2 0.4 Other expenses 1.7 0.8 5.5 Totala 99.8 100.2 101.2 a Totals may not equal exactly 100, caused by data approximation. Source: INSTAT, 2002 16 Urban food demand, food insecurity, and food supply and distribution systems

The household’s overall expenditure on food has decreased considerably, but eating out is increasingly common; few Albanians could afford to do so in 1994, whereas almost five percent did in 2004.

The percentage of expenditure on food, drinks and tobacco varies among social groups. There is a positive correlation between these percentages, on the one hand, and the number of children per household and the unemployment rates among household members, on the other. In contrast, all these factors tend to be negatively correlated with education, i.e. more educated people tend to spend a smaller percentage of their budget on food, beverages and tobacco, have fewer children and are less affected by unemployment.

Table 7. Composition of the household budget according to the head of household category (in percentages)

Expenditures Employed Unemployed Retired Housekeepers Emigrants persons persons persons Food, tobacco, beverages 55.90 61.60 60.80 83.80 57.40 Clothes, footwear 5.60 4.70 4.90 n.a. 6.20 Rent, electricity, water 6.40 6.70 8.10 9.00 7.70 Equipment, furniture 6.20 6.00 6.60 4.50 7.60 Health care 2.10 3.50 3.50 1.00 1.80 Transport, communication 9.30 5.70 5.60 0.20 7.40 Education, entertainment 6.40 4.30 3.40 1.20 5.20 Personal care 2.40 2.30 2.10 n.a. 1.60 Other 5.70 5.20 4.90 0.20 5.20 Totala 100.00 100.00 99.90 99.90 100.10 a Totals may not equal exactly 100, caused by data approximation. Source: INSTAT and World Bank, 2002

The Albanian diet is a typical Balkan diet characterized by many fresh fruits and vegetables (depending on the season), cereals, potatoes and vegetable oil. Alcoholic beverages are consumed sparingly and the consumption of sea products is still low (Berisha and Mara, 2005).

For religious reasons, consumers discriminate among types of meat (e.g. Muslims do not consume pork). There are also differences between rural and urban diets. Rural consumption is based on fresh farm products, while urban consumers are sometimes forced to rely on processed fruits and vegetables, including frozen and preserved products, particularly during the off-seasons (FAO, 2005). In all cases though , there is an undisputed preference for fresh produce, as shown in the frequency of consumers’ purchases: 33.3 percent of consumers surveyed in Tirana’s city markets buy food on a daily basis (Centre for Rural Studies, 2005).

Before 1990, the per capita supply mainly consisted of cereals (wheat and maize) as a result of the communist government’s policy of pursuing self-sufficiency in the production of staple foods. Since all efforts and resources were concentrated on this goal, the production of other food items – fruits and vegetables, meat, dairy products – was not high on the government’s priority list.

The collapse of the regime in the early 1990s and the consequent opening up of the economy brought about many changes. ( See in the annex table 18 to table 27). Increased import flows and changes in per capita income and lifestyle all had a great impact on food diversity. The immediate effect was dietary improvement, with significant increases in the consumption of fresh fruits and vegetables, meat, eggs and The food supply and distribution system of Tirana, Albania 17

dairy products. Table 8 shows that the daily supply of these products more than doubled from 2000 to 2002, compared to 1986–1988, while cereal consumption was reduced by about one-third.

Table 8. Annual trends in product supply per capita in Albania 1965-2002, (grams/day)

1965-1967 1972-1974 1979-1981 1986-1988 1993-1995 2000-2002 Cereals 529 579 611 601 550 457 Starchy roots 38 45 50 39 55 87 Sweeteners 38 44 48 50 80 70 Pulses, nuts, oil crops 26 22 19 21 21 38 Fruits and vegetables 291 324 339 290 461 679 Vegetable oils 9 14 27 21 22 23 Animal fats 13 9 9 12 10 7 Meat and other animal products 48 45 50 47 79 103 Fish an seafood 6 10 9 9 5 11 Milk and eggs 273 310 373 363 708 818 Other food items 20 24 24 30 52 60 Source: FAO, 2005.

Most people have three meals a day – breakfast, lunch and dinner – but rapid changes in society such as urbanization, time constraints and irregular working schedules have affected their eating habits. With no time to cook food at home, more people tend to skip breakfast, and take-away food is becoming popular.

Food insecurity

According to the World Bank, food insecurity in Albania is not an issue anymore, but supply shortages are the result of the poor general economic situation of households. Many cannot afford to buy all the food they need, especially in rural areas. According to the 2002 LSMS, one-third of the households in rural areas are not able to obtain even the minimum quantity of basic food.

Food consumption in Tirana

It is difficult to present a clear picture of the food consumption situation in Tirana. The analysis needs to be based on:

• data on domestic food flows to Tirana; • data on imports at the regional level; • data on food stocks and evaluating losses during the year.

These figures are difficult to measure and are not currently available. For these reasons, food consumption cannot be calculated using FAO’s methodology for calculating food balances, which is:

Per capita supply = (production + imports - exports + stocks)/population.

 Albania has experienced shortages in food supply in particular moments during the transition period (1991), but the situation has currently stabilized. 18 Urban food demand, food insecurity, and food supply and distribution systems

The MAFCP does provide statistics on production regional balances, but does not consider food imported to Tirana from other regions, so this data is also unsuitable. The only tool for estimating food consumption levels in Tirana is the household budget table (see Table 9).

Table 9. Household budget

Item kg/per kg/year kg/year in 2011 kg/year in 2016 capita/month in 2005 (projection) (projection) in 2005 Staple food 16.11 77 780.360 90 196.520 102 230.640 Meat and Fish 1.81 8 737.739 10 132.550 11 484.450 Dairy and other animal products 8.29 39 995.670 46 380.230 52 568.330 Edible oil 1.77 8 539.810 9 903.030 11 224.310 Fruits and vegetables 10.24 49 452.710 57 346.900 64 998.180 Water and fresh drinks 0.78 3 765.430 4 366.520 4 949.100 Eggs 0.56 2 703.389 3 134.934 3 553.200 Other 1.79 8 617.050 9 992.600 11 325.830 Food outside home 3.22 15 558.970 18 042.660 20 449.940 Total 44.57 215 151.128 249 486.944 282 783.980 Source: INSTAT and World Bank, 2002.

Statistics show that the capital city’s population consumed 215 151 tonnes of food in 2005 and is expected to consume 282 783 tonnes in 2016. Total consumption is therefore expected to increase by 31.4 percent in 11 years.

Increased and diversified food consumption calls for relevant changes in the supply and marketing system. Infrastructure should be upgraded to handle increased transportation flows; new market facilities should be built and existing ones should be improved in terms of quality, hygiene, safety and services for both traders and consumers. Retail outlets and wholesaling facilities should also be improved.

3.2 FOOD SUPPLY SYSTEMS

Demographic growth in Tirana led to urban expansion and loss of productive land to the extent that the regional food balance is now negative. As research has shown, Tirana is unable to feed itself. Table 10 shows Tirana’s food deficit in quantitative terms.

The lack of an urbanization plan for the suburbs and the increased opportunity costs of having green areas in the city make the contribution of urban agriculture to the overall production irrelevant so much so that no one has ever even tried to assess its importance on the regional food balance. Some households own small gardens in peri-urban areas and grow small quantities of fruits and vegetable, which are normally consumed within the household or given to friends and relatives. These garden products – particularly fruits and flowers – rarely reach the market.

 The table lists the per capita consumption for different foodstuffs, calculated on the basis of a household’s food expenditure over a two week period. Data are collected by the households in notebooks. The total food consumption of the Tirana population was calculated as follows: annual food consumption = sample persons’ average monthly consumption × 12 months × total population. For 2011 and 2016, calculations were made using forecasts and estimates provided by INSTAT. The food supply and distribution system of Tirana, Albania 19

Table 10. Production, consumption and food balance in the city of Tirana Vegetables Potatoes Fruits Total Production (tonnes) 50 800 5 475 4 608 60 883 Consumption (tonnes) 151 945 35 593 18 392 205 930 Food balancea (tonnes) –101 145 –30 118 –13 784 –145 047 a Figures are based on FAO estimations on local consumption levels: consumption of vegetables, 188.37 kg/per capita; consumption of potatoes, 44.13 kg/per capita; consumption of fruit, 22.8 kg/per capita. Source: MAFCP, 2005

The Dinamo wholesale market in Tirana shows that the capital city’s contribution to its overall supply accounts for no more than seven percent of the total. Systematic supplies from other areas (particularly Lushnjë, Fier and Saranda) or imports from neighbouring countries (Greece, Macedonia and Italy) are required. Exchanges with these three countries account for about 85 percent of Albania’s international trade (INSTAT, 2005).

Marketing margins and prices

To date, no relevant study concerning marketing margins has been conducted in Albania. Marketing margins for fresh produce vary on average between 30 and 40 percent of the farmgate price. For other foodstuffs, margins vary on average between ALL10 and ALL1 000. Higher margins should be attributed to factors such as:

• location of the retail outlet; • level of the offered services; • type of product.

Value-addition along the marketing channel is often perceived as abusive, but experts affirm that a major part of price increases (margins) is necessary for retailers to sustain the costs related to product handling and sorting, and the uncertainty associated with the food sale, which must also take into account factors such as product spoilage. However, these experts do admit that a fraction of these margins is abusive. Table 11 shows the increase in value at the retail level of the food chain. 20 Urban food demand, food insecurity, and food supply and distribution systems

Table 11. Prices and margins of the main food products in wholesale and retail markets, 2004

Product Wholesale price Retail price Difference in price Retail margin (in percentage) Tomatoes 59.4 94.0 34.6 36.8 Peppers 73.1 120.0 46.9 39.1 Onions 42.6 63.0 20.4 32.4 Garlic 134.6 200.0 65.4 32.7 Beans 112.0 161.0 49.0 30.4 Potatoes 33.8 55.0 21.2 38.5 Apples 65.7 112.0 46.3 41.3 Grapes 92.0 197.0 105.0 53.3 Oranges 84.3 120.0 35.7 29.8 Eggs 9.0 11.0 2.0 18.2 Flour 51.0 56.0 5.0 8.9 Sugar 60.0 64.0 4.0 6.3 Edible oil 123.0 130.0 7.0 5.4 Noodle 93.0 107.0 14.0 13.1 Tomato sauce 46.0 60.0 14.0 23.3 Source: MAFCP, 2004b and authors’ calculations.

Wholesalers tend not to apply higher margins when under pressure of product spoilage, because they manage to make satisfactory profits by trading in larger quantities.

Improving the marketing system in order to increase efficiency will create opportunities for eliminating the abusive and speculative component of marketing margins, thus allowing for a reduction of retail prices. If costs are lower, lower margins will be needed to cover them.

Together with seasonal variations, price fluctuations are especially high during holiday seasons, especially for vegetables and fruits. Figure 1 shows three products that display seasonal price fluctuations, depending primarily on fluctuating import inflows.

 For more information on production prices of different food products, see in the Annex Table 26. The food supply and distribution system of Tirana, Albania 21

Figure 1. Price levels for tomatoes, peppers and grapes in different months of 2004

Source: MAFCP, 2004b.

The above trends are common for vegetables and fruits; price fluctuations for staple foods such as wheat and maize follow different patterns, mostly shaped by external factors rather than by production periods in the country.

Consumers’ protection

Administrative and legal structures responsible for ensuring the competitive nature of markets, and protecting consumers from abuses are still fragile.

Research showed that 55 out of 61 retail outlets are legal , i.e. they obtained an activity license by the municipality, but only 14 of them met basic hygiene and sanitary standards (Institute of Public Health, 2002). Product counterfeiting is a common practice in the production and marketing of food products, particularly for alcoholic and soft drinks, milk and dairy products and edible oil. Labelling is inappropriate, often lacking information on product content, nutritional facts, use instructions and expiry date.

Food sold illegally on the street is a major source of income for many households, particularly in the countryside, and butchering animals is done with little regard for sanitary and veterinary regulations. The law establishes fines ranging from ALL5 000 to ALL300 000 for sellers, butchers and other sellers caught breaking the law, but there is great confusion over the division of responsibilies between the Food Control Inspectorate and the Veterinary Inspectorate (which depends from the MAFCP), the Sanitary Inspectorate (which depends from the MOH) and the municipality’s territory control directorate. The lack of a strong enforcing authority inevitably leads to a low and ineffective protection of the consumers’ rights. 22 Urban food demand, food insecurity, and food supply and distribution systems

Box 1. Consumer Protection Association

“As an association for consumer protection, we have positioned ourselves on the consumers’ side. In every holiday season we did our best to raise the awareness of institutions and have them take appropriate measures against abusive price increases by traders. These abusive price increases trigger strong inflationary fluctuations, thereby turning [this situation] into both a micro and macro issue. Also, in order to draw consumers’ attention, we distributed flyers advising them to use the expression “How do you dare?” whenever they faced abusive price increases by food retailers.” Business, 24 December 2005

3.3 URBAN FOOD DISTRIBUTION SYSTEMS

Markets

In Tirana, city supply and distribution channels are characterized by fragmentation and confusion over role division. Often, small producers, retailers and wholesalers try to sell their products at the same urban marketplace, while instead they should sell in different locations and to different targets.

Key actors in food distribution are intermediaries who represent a strong reference point between small farmers and wholesalers. Some collectors prefer to establish links only with suppliers from their area, whereas others move from one area to the other, depending on season and opportunity. Some intermediaries sell the products that they collect in markets, while others bring them to wholesalers. In some cases, the intermediaries are producers themselves, integrating their crops by purchasing other producers’ production, and then bringing everything to the market or to wholesalers. Figure 2 depicts various marketing channels.

The food supply and distribution system of Tirana, Albania 23

Figure 2. Marketing channels

Agribusinesses, farmers, fishers, manufacturers

Wholesaler Full service wholesale

Retailer Limited service wholesale Agricultural merchants Supermarkets Direct sales Grocery stores Own sales force Own sales outlet

Customers

Direct marketing systems

Direct marketing between producers and consumers occurs when short distances make it possible. Farmers who sell directly to their consumers always face a trade-off between the benefits of direct sale and the opportunity cost of not working in the fields. About 77.8 percent of the farmers identify transportation as one of their biggest problems; given the small quantity of marketable product that they handle, transportation accounts for most of their costs. Storage is also a major problem: 75.6 percent of the producers cannot keep their products for long periods of time because of the lack of silos and cold rooms (Centre for Rural Studies, 2005).

Surveys reveal that 70 percent of the farms in Tirana’s municipality sell directly to final consumers (INSTAT, 2002). The remaining 30 percent sell mostly to wholesalers and retailers, but also direct a small percentage to final consumers. Accordingly, the percentage of farmers that sell directly to consumers sums up to 85 percent of the total.

Many consumers demand higher standards of service in the food market, as some indicators point out:

• 55 percent of consumers think that they have inappropriate market facilities in their neighbourhood; • 68 percent see street selling as a problematic issue;

 Data from the 2002 LSMS showed that two-thirds of an average rural household income is derived from agriculture, with increasingly more cash income deriving from the sale of livestock products, milk, vegetables, fruits and grapes. 24 Urban food demand, food insecurity, and food supply and distribution systems

• 68 percent believe that business activities in residential areas should be limited to certain hours of the day, whereas only 21 percent think the opposite (Tirana Municipality, 2004a).

Given these opinions, regulating street selling activities and business activities should be a priority in the municipality’s agenda. Unfortunately, for many reasons, including financial constraints, very little is moving in this direction.

Furthermore, sectoral policies do not support state budget investments for slaughterhouses and refrigerated space, but rather suggest that such investments be taken over by private enterprise (MAFCP, 2003b). It should be borne in mind, however, that if operated by the public sector, these investments would provide better hygiene, fewer losses and reduced risks of food transmittable diseases.

A major concern from the local establishment is that institutional, urban development and demographic factors should not be the only ones considered; the effects that the establishment of new markets would have on family budgets for either consumers or sellers should also be taken into account.

Retail

Many types of retailers operate in the capital city, ranging from retailers who have their permanent shops and sell fresh produce, to farmers who sell alongside roads near their plots and fields.

The retail sector includes a wide range of outlets such as public retail markets, spontaneous markets, formal and informal shops and supermarkets.

Currently, there are 15 public markets in Tirana, which are administered by the General Directorate for Local Taxes and Tariffs of the Tirana municipality and by the mini-municipalities. These public markets consist of 22 685 m2 of total surface area, although only 70 percent of this surface is currently exploitable. These markets can potentially accommodate 1 870 traders per year, but current exploitation levels do not exceed 850 traders per year. The situation is critical in markets such as 5 Maji, where only 15 traders engage in their activity, or in the meat market where only 50 percent of the capacity is exploited. The food supply and distribution system of Tirana, Albania 25

Map 6. The public retail market distribution in the city of Tirana

In addition to public markets, there are privately administered markets that apply charges in exchange for very basic services to traders. Despite permanent controls exerted by municipality inspectors (their number doubled in 2005), hygiene and sanitary conditions and associated infrastructure are so poor that neither public nor private markets offer storage or handling space that comply to hygiene requirements. Transportation infrastructure near markets is also poor, especially when considering that future needs will be greater than present ones.

The inability to fully exploit all the marketable space in public markets should not be attributed solely to the above factors, but also to the fact that many vegetable and fruit traders tend to sell outside these markets in order to avoid paying market occupancy tax. Furthermore, they consider it more attractive to sell outside these markets for there is less competition. 26 Urban food demand, food insecurity, and food supply and distribution systems

Box 2. Astrit, trader, 45 years old

“The market occupancy tax we pay is high. We duly pay the taxes, but in exchange we do not get adequate services, as many are not offered. Even though we pay ALL3 000 per month, this market doesn’t attract many consumers and traders. Many consumers are lured by farmers who sell on the streets near the market. They place the products on the ground and this total lack of hygiene doesn’t disturb the buyers at all since they appreciate slightly lower prices (farmers don’t pay taxes) and are deceived by the image of freshness conveyed by the farmers’ products”.

The municipality is making efforts towards promoting public markets and stopping consumers from buying on the street, with awareness-raising actions such as distribution of flyers or use of other promotional instruments. However, the large dispersion of informal traders and the low number of municipality police officials to stop them make on-street selling activities still very significant.

Box 3. Zana, housewife, 42 years old

“I often buy from the farmers. They offer lower prices for vegetables and fruits produced in their farms. Actually, I do not buy any processed products from farmers because I am not sure about their quality and safety. However, they offer better prices than vendors in public markets; there most of the goods are imported and prices are higher.”

Hygiene and maintenance conditions vary from market to market, but are generally poor. Municipality staff should urgently be given guidelines on effective market management.

Supermarkets

Supermarkets are part of the radical change brought about by private enterprise in their efforts to better serve consumers. Such services are still scarce and in their initial stages, but their growth rates show great potential and indicate that more western-style purchasing behaviour is slowly being adapted.

In the capital city there are about 30 supermarkets, although their size and the selection of articles offered are far more limited than in the western world. The sector’s development is very dynamic and the number of supermarkets is constantly increasing.

An interesting model is the Univers shopping centre, which started its activity in September 2005; it is 12 km from Tirana and offers all the required standards in a pleasant atmosphere, in addition to offering a shuttle service for those without private vehicles from the city of Tirana to the supermarket. The food supply and distribution system of Tirana, Albania 27

Wholesale

Tirana has 69 wholesale points as well as 63 outlets that act as a cross between a wholesale point and a retail outlet. This reflects Albanian consumers’ buying behaviour, which is generally diffident towards prices offered by retail outlets and supermarkets – 23.3 percent of food purchases by final consumers take place directly at wholesale markets, because products are deemed fresher (in the case of fruits and vegetables) and cheaper (in the case of staple foods) (Centre for Rural Studies, 2005).

Since the wholesalers’ normal role in the distribution chain is to obtain large quantities of goods from farmers and other sources, and to prepare and deliver them to retailers, the problem is that by offering lower prices, wholesalers end up distorting prices throughout the marketing chain.

Currently, there is only one wholesale market for fruits and vegetables in Tirana, compared to three in the past. It is situated on the remains of the former Dinamo factory, from which it takes the name, and its total surface area amounts to five hectares. The property of the Dinamo wholesale market is divided as follows:

• 62 percent is private; • 5 percent belongs to the former employees of the factory; • 33 percent is owned by the state agency for privatization.

In addition to a number of occasional traders who sell food products on a daily basis, 170 permanent traders operate in this market. Sixty percent of fruits and vegetables sold year-round are imported from other countries, while rural areas of the Tirana district contribute only seven percent of the total supply.

The market offers services such as parking, product handling and weighing, storage and transportation. Traders pay taxes for rent, cleaning, occupancy, electricity fees and other services. Electricity is paid twice: to the market’s owners and to the Albanian electric corporation.

Among the more problematic issues, waste management is inappropriate and traffic around the market is congested, especially during the day, even though municipality regulations state that all activities with a high impact on traffic should take place during night hours.

Upgrading and modernizing this market is vital for future demographic growth; otherwise, the growing needs of Tirana will be satisfied by informal markets that would spontaneously emerge around the city. 28 Urban food demand, food insecurity, and food supply and distribution systems

Map 7. The public wholesale market distribution in the city of Tirana

Box 4. Petrit, wholesaler, 40 years old

“The Dinamo wholesale market cannot adequately face food flows coming into the capital city. Even though we pay all the charges, neither private enterprises nor public institutions are committed to further improvements. There is no space for parking. We try to clean up the space ourselves or we pay other people to do so and we also pay for loading and unloading.

Handling operations are non-existent, except for some kind of sorting. Of course, opening up another market would be a solution, but there are still uncertainties about moving to another location, as there is the chance that it would not attract an adequate number of traders. Opening up such a market requires public funds or the involvement of powerful donors.”

In order to correct the negative aspects shown in the Dinamo wholesale market, the possibility of establishing mixed markets – both for fresh products and other foodstuffs – was considered. Even though a specific location was identified, the establishment costs would have made utilization tariffs higher than the ones currently charged to wholesalers. Initially, it was planned that the establishment of a new market would go together with the closing of the Dinamo wholesale market. In fact, compensation costs (to be paid to the Dinamo market wholesalers) were extremely high to the The food supply and distribution system of Tirana, Albania 29

extent that shutting down the market was no longer considered a viable solution. As a result, the best solution considered was to have the two markets co-exist.

Slaughterhouses

In Tirana there are six improvised locations for slaughtering activities, which do not meet hygiene and sanitary standards. The only slaughterhouse approaching such standards belongs to the Yzberish Meat Company. Moreover, many slaughterhouses only separate the carcass from the entrails, leaving other operations to butchers, such as separation of internal organs from the carcass and breaking of the bulk and anatomical cuts, that are even harder for authorities to check and monitor.

In addition to sanitary problems, the fact that the sector is largely made up of informal businesses also means that no tax is paid. It does seem, however, that buying meat from the informal sector is a common practice because the products can be cheaper (since the businesses pay no taxes) and are perceived as fresher. On the other hand, people do not seem concerned by the possible health consequences; Albania is experiencing an increase in brucellosis�,10 which, although not widespread, has alarmed authorities.

Map 8. Slaughterhouse distribution in the city of Tirana

10 A disease transmitted through contact with animal tissue or through the ingestion of contaminated milk or dairy products. 30 Urban food demand, food insecurity, and food supply and distribution systems

Street vendors

This category can be divided in:

• vegetable and fruit vendors; • fast-food and refreshments sellers.

Since their activity is largely informal, potential problems related to food safety, environmental concerns and, finally, tax evasion may arise.

Box 5. Nardi, street vendor, 35 years old

“I come almost every day to sell in Tirana. It is not worthwhile to sell in the market since you have to pay to be there. I try to sell on the street or in nearby apartment blocks. There are many other vendors like me. My goal is to sell milk and small quantities of vegetables and fruits by noon. We are afraid of the municipality police’s controls, so we change the location of our activity every day. Anyway, we manage to sell milk because it is fresh, clean and unprocessed, just like the packaged one, and the buyers prefer it. Furthermore, our price is lower than packaged milk. Official propaganda on the safety of our milk is nothing but sheer palaver. Our animals are lively and kicking, and we do not milk them if they are sick, but we immediately call the veterinarian.”

Taxes and charges

Local tax levels for food sellers in general, and for fruit and vegetable sellers in particular, have been reformed over the years.

Local governments are responsible for many forms of taxation and their levels are defined on the basis of where the business is located and how much space it occupies. The income that they generate should cover the costs of both waste removal and green space regeneration and should be used to provide market services.

Unfortunately, traders complain about the quality of the services offered by the local government, deeming them poor and inadequate compared to what they pay for them. Table 12 provides three examples of taxation imposed by local government on food sellers.

Table 12. Different taxation levels, 2005

Category of business Cleaning tax/year Green tax/year (ALL) (ALL) Dairy, meat, fish 20 000 Fruits, vegetables and other foodstuffs 15 000 Service outlets 5 000 – 20 000 7 000 – 10 000 Itinerant sellers 1 500 Fast-food sellers 10 000 – 12 000 Sellers outside the public market Source: Authors’ estimations. The food supply and distribution system of Tirana, Albania 31

Taxes are paid annually, but the level of taxation is reduced by 50 percent for activities that are operational only in the second half of the year. Payments are usually due within the first months of the year, even when referring to the second half of the year.

The food supply and distribution system of Tirana, Albania 33

4. The city and the food supply and distribution in the future

4.1 THE CITY IN TEN YEARS

A demographic forecast by INSTAT predicts that the population of Tirana will increase by 31 percent from 200511 to 2016, reaching 528 750. Figure 3 shows the demographic growth trend.

Figure 3. The dynamics of the Tirana population, 2001–2016

Source: INSTAT, 2004a.

The following section will present a projection of Tirana in ten years; section 4.2 presents the future situation assuming that no major change will occur, whereas section 4.3 presents the situation that would occur if positive changes were made.

4.2 THE STATUS QUO SCENARIO

From the point of view of satisfying basic needs through an efficient and reliable food supply and distribution system, demographic growth is an issue that causes a number of concerns. Tirana already

11 There are various demographic projections for Tirana according to differences in sampling and methodology. A high number of voters who did not appear in the lists of their area of residence were found during the last update of administrative records (before general elections). A possible explanation is that administrative records do not keep track of migratory flows, which involve approximately 60 000 individuals per year. This is an example of how the city’s population can easily be underestimated. 34 The city and the food supply and distribution in the future

has some problems with its FSDS, and difficulties can only grow in the future unless a new long-term approach to food supply is used.

The lack of a medium-term regulatory plan for Tirana adds confusion to the markets’ organization. Foodstuffs wholesale markets and fruit and vegetable wholesale markets should be in different locations and well distributed throughout the city, ( not the case at present), in order to allow better planning of public retail markets, which get their supplies from wholesalers. This is a particularly urgent need since newly populated areas of Tirana are very often not well served as a result of the lack of urban standards on the establishment of market infrastructure.

If the development of a clear urban plan were to neglect population size, its density, and the associated necessary services, the currently chaotic situation in the capital city suburbs will only get worse, and people would have no alternative to the informal sector to satisfy their basic needs.

Another factor hampering the creation of efficient new markets or service facilities is the high price of land, especially in urban areas. Legislative action appears to be the only long-term solution to this problem.

Meeting the increased food demand of the urban population will be problematic if links between rural and urban areas are not strengthened. There is an urgent need for action relating to market organizations, collectors and other intermediaries.

In addition to the four already established wholesale markets in the country (only one of which is in Tirana), special attention should also be paid to the establishment of other local markets and collection infrastructure in different areas, which would improve the overall efficiency of the market system.

If the central government does not show any special interest in investing in market infrastructure improvements, in ten years the capital city’s market will be in the hands of imported goods wholesalers and rural areas will see their unsold products go to waste.

In addition to its bleak consequences on the economy of rural areas, the reliance to a large extent on imported rather than on domestic foodstuffs is also risky for the overall economy, because supply will always depend on external, uncontrollable factors. In time, customs procedures will be alleviated, hence facilitating the flow of imported products in the market, but high bureaucracy levels and high corruption levels could always create problems in the supply inflow.

Concerning the transport of imported goods, important arteries such as Zogu i zi, 21 Dhjetori, Vasil Shanto, Medreseja or Rruga e Elbasanit will become congested if they are not modernized. Furthermore, operations such as loading or unloading in markets are restricted to night hours by municipal regulation; while this alleviates traffic problems, it makes it harder for traders and truck drivers to do their job.

A 30 percent increase in the city’s needs is predicted for 2016, and the only way to ensure regular supplies will be by either lifting restrictions on the truck’s access to the city, which does not seem a viable solution, or upgrading the road system.

Finally, decentralization could benefit the city’s situation, as local governments are normally seen as knowing more about local needs and expectations. However, at its current levels, decentralization is The food supply and distribution system of Tirana, Albania 35

still too limited to offer interesting opportunities in terms of public investments aimed at substantially improving the quality of life in the capital city.

4.3 THE DESIRABLE SCENARIO

If the desired positive changes were made in ten years, Tirana would look completely different. If the city were to apply a clear development plan for the FSDS within the next two years, it would be in the final phase of its short-term implementation by 2016.

A necessary condition for the establishment of markets was that the institutions in charge of territorial planning would have already clarified the division of responsibilities between districts and municipalities and had defined standards for markets and services.

The markets would be located according to population density, the available space and access to roads of a given area. They would be run privately, but the public sector would act as supervisor and monitor the services offered by the markets.

Suburban ‘informal’ areas would be legalized and become attractive locations to establish markets and slaughterhouses. In addition to having more selling space, they could also function as collecting points, thus facilitating the flow of products along the marketing chain and better serve residents of these areas, which up until now had been poorly served by markets.

Central and local governments would lead programmes aimed at supply regulation and would work together in developing local capacities.

The goal would be to reduce bureaucracy in the market sector in the hope that this would trigger other positive outcomes:

• corruption along the supply side would diminish, creating a more enabling environment for businesses; • private enterprises would be stimulated to invest more in the sector since it would be less troublesome and more convenient; • supply channels would diversify; • price discovery would be more transparent.

From the consumers’ point of view, a clear-cut role division in the supply chain (e.g. having retail and wholesale markets in different locations) and the growing presence of supermarkets – which bring more competition to the system – would lower prices and reduce opportunities for the small retailers to apply abusive margins, which would put them out of the market.

The food supply and distribution system of Tirana, Albania 37

5. Conclusions

Tirana is and will remain the most important city of Albania and will continue to play a key role in the political, economic and social progress of the country. Growing demographic flows and the chaotic settlement of people in the suburbs will play a relevant role in the capital city’s future development. This is a consequence of the political and socio-economic changes that took place in the last 15 years and of the precarious institutional scenario that still exists. Tirana’s suburbs accommodate many people who emigrated mostly from Northeastern Albania; this new population demands appropriate transportation, education and health infrastructure, as well as full access to products and services markets.

Since the population of the capital city is expected to increase by 31 percent in the forthcoming decade, a clear urban plan for the suburbs must be urgently prepared. In ten years, the ring road (see Map 3) delimiting the capital city’s central area is expected to change and cover a surface double that of the current area. Increased demand for better and more diversified services of food supply and distribution requires improvements in the markets’ infrastructure, location and area coverage, which are still inadequate and fail to meet the populations’ demand.

Improvements in infrastructure are badly needed and should take into account not only central urban areas (those located within the old ring road), but also newly populated areas in the suburbs. The establishment of bigger and more efficient markets are difficult in areas where the population’s settlement has been chaotic, yet these are the areas that most need such markets. If action is not taken and such infrastructure is not implemented there, the problem will only worsen, and the area will never be well served. In this case, food supplies will be totally dependant on the private sectors’ will.

It is difficult to imagine a positive development of the FSDS if sensitive issues are not addressed, including: the presence of informal areas; a lack of clear-cut institutional responsibilities; the poor financial situation of local government; the lack of long-term urban planning and political instability.

Decentralization is still at the initial stage, so there are frequent inefficiencies and shortcomings in the implementation of the central government’s programmes at the regional and municipal level. Role division, namely in fund management, is not clearly defined. Local governments are in charge of the maintenance and development of the market facilities and the establishment of new markets, but seldom have the financial and technical means to fulfil their duties properly.

Policies set on the basis of sectoral and regional strategies that also affected the FSDS appear to be hampered by institutional apathy. Relations between the government and private enterprises must be made more effective; there is a lack of dialogue and joint decision-making, and the government often fails to provide adequate information to the enterprises - i.e. to the main beneficiary of these plans- on regional plans and programmes.

Investments in already established markets should be aimed at re-planning location and redesigning offered service mixes, upgrading necessary infrastructure, if needed. These tasks are delegated to municipalities, but there are no special funds allocated to them by the central government for this 38 Conclusions

purpose. As a result, financial constraints make it difficult-if not impossible-for local governments to fulfil their goals. It is necessary for the municipality to actively improve its administrative capacities and its monitoring of mini-municipalities. Since lack of governmental funding is a problem, action should be taken to involve the private sector and civil society to recognize the value of promotion, external resources and capacities. The food supply and distribution system of Tirana, Albania 39

References

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The food supply and distribution system of Tirana, Albania 41

Annex

Table 13. People interviewed

Name Institution Department 1 Roland Cela GTZ Project Manager of GTZ project “Modernization of Agriculture and Food Sector- EU Approximation” 2 Erald Lame GTZ Expert on Marketing Information Systems. “Modernization of Agriculture and food sector- EU approximation” 3 Niko Zherdi Market and Traders President Protection Association

4 Leka Filto INSTAT Agricultural Sector 5 Anila Shehu Municipality of Tirana Territory administration directory

6 Vjollca Bimo Ministry of Agriculture, Food Marketing Sector and Consumer Protection

7 Hermiona Hajdini Municipality of Tirana Directorate on territory control, veterinary sector

8 Aida Gega Municipality of Tirana Finance chief, directorate of tax and tariffs collection

9 Dritan Belegu Meat Producer Association Director 10 Luan Dervishej GTZ Municipality Director Development Project

11 Ten retailers Lapraka, Mine Peza, Pazari

12 Ten consumers Consumers from different areas with differentiated incomes and professions 13 Ten wholesalers Dinamo wholesale market food units 42 Annex

Table 14. Data on the Tirana region

Region District Municipality Commune No. of Population Total area villages km2

District of Tirana Zall-Bastar 12 6 520 52.5 3 municipalities Zall-Herr 9 9 529 55.9 16 communes Pezë 10 6 076 87.0 Municipality of Tirana Farkë 6 9 089 21.2 (11 mini-municipalities) Vaqarr 10 8 000 39.4 Population: 402 290 Area: 41.8 km2 Ndroq 11 9 370 20.3 Municipality of Kamze Bërxullë 3 6 898 8.8 (1 town + 6 villages) Shëngjergj 12 4 718 29.6 Population: 71 500 Prezë 7 6 062 24.0 Area: 21.8 km2 Baldushk 14 6 100 11.0 Petrelë 17 6 800 21.1 Dajt 13 8 561 114.5 Kashar 7 17 050 40.8 Krrabë 3 3 750 1.9 Bërzhitë 11 6 152 16.0 Municipality of Vora (1 town + 8 villages) Paskuqan 8 29 921 70.4 Population: 16 207 Area: 36.7 km2

Helmës 10 4 988 64.4 District of Kavajë: Kryevidh 10 8 810 42.2 2 municipalities 8 communes: Sinaballaj 9 2 550 28.0 Golem 11 10 246 20.8 Kavajë

of Luz i Vogël 4 9 335 23.7 Municipality of Kavajë (Kavajë Town) Gosë 5 7 335 44.7 Population: 35 988 Synej 7 9 618 20.8 District Area: 18 km2 + Lekaj 9 9 503 44.0

Municipality of Tirana Rrogozhine of Region (1 town + 1 village) Population: 10 789 Area: 15 km2 Tirana District

Source: Ministry of Local Government and Decentralization, 2005. The food supply and distribution system of Tirana, Albania 43

Table 15. Poverty and inequality indicators in the Tirana region

District Commune Head counta Gini coefficient (percent) Consumption (percentage) (ALL/capita/month) Kavajë Sinaballaj 43.20 22.85 5 658.50 Gosë 41.33 25.76 6 028.76 Helmës 40.28 26.76 6 196.93 Kryevidh 38.62 24.88 6 158.33 Lekaj 36.83 25.66 6 357.54 Luz i vogël 34.96 26.63 6 616.27 Golem 32.16 26.44 6 820.02 Synej 29.26 25.16 6 912.36 Rrogozhine 27.95 29.47 7 676.52 Kavajë 12.90 28.26 10 026.09 Tirana Vaqarr 47.41 26.75 5 699.30 Shëngjergj 45.65 23.98 5 648.27 Baldushk 44.02 25.06 5 818.35 Petrelë 42.72 27.03 6 036.59 Zall-Herr 42.23 24.39 5 880.84 Pezë 41.22 25.54 6 045.98 Krrabë 41.15 25.46 6 020.20 Prezë 40.39 27.10 6 243.29 Dajt 35.88 27.98 6 711.93 Zall-Bastar 34.68 27.95 6 848.38 Bërzhitë 33.53 27.16 6 769.70 Bërxull 33.04 27.82 6 939.43 Farkë 32.86 25.80 6 693.55 Ndroq 32.74 29.24 7 179.32 Paskuqan 27.76 26.59 7 288.45 Kashar 25.65 26.99 7 542.32 Kamzë 27.09 25.76 7 236.27 Vorë 23.50 25.73 7 574.76 Tirana 17.84 29.32 9 003.02 a Head count is the proportion of all individuals whose level of consumption is below the basic needs poverty line. Source: INSTAT and World Bank, 2002. 44 Annex

Table 16. Main economic data, 1998–2004

Unit 1998 1999 2000 2001 2002 2003 2004 Population Million 3.35 3.37 3.23 3.08 3.10 3.10 3.12 Inflation Percentage 20.90 0.40 0.00 3.10 5.20 2.40 2.90 Exchange rate ALL/US$ 150.60 137.70 143.70 143.50 140.20 121.90 102.80 GDP US$ billion 2.70 3.40 3.70 4.10 4.50 5.70 7.60 GDP real growth Percentage 12.70 10.10 7.30 7.20 3.40 6.00 6.00 GDP per capita US$ 816.00 1 021.00 1 143.00 1 334.00 1 450.00 1 837.00 2 431.00 Total income Percentage of the GDP 24.90 26.00 24.60 24.70 24.50 24.10 23.60 Total expenditure Percentage of the GDP 34.30 34.90 32.10 31.60 30.60 28.90 28.50 General deficit Percentage of the GDP -9.50 -9.00 -7.50 -6.90 -6.00 -4.90 -4.90 Internal debt Percentage of the GDP 36.20 37.40 42.60 39.60 38.80 40.40 37.80 External debt Percentage of the GDP 36.90 32.30 31.60 28.20 24.40 21.10 18.30 Trade balance US$ million -604.00 -663.00 -821.00 -1 027.00 -1 155.00 -1 336.00 -1 579.00 Exports US$ million 208.00 275.00 255.00 305.00 330.00 447.00 603.00 Imports US$ million 812.00 938.00 1 076.00 1 332.00 1 485.00 1 783.00 2 182.00 Export growth Percentage 31.10 32.30 -7.20 19.30 8.40 35.40 35.00 Import growth Percentage 17.00 15.50 14.80 23.70 11.60 20.10 22.40 Source: Ministry of Finance, 2005.

Table 17, Poverty indicators in Albania, 1998, 2002, 2003

Indicator 1998 2002 2003 Percentage of population that consumes below the level of basic needs n.a. 25.40 n.a. Percentage of population that consumes less then the minimal level of calories n.a. 4.70 n.a. considered sufficient for a healthy lifestyle Percentage of population that consumes below 60 percent of median consumption 29.60 13.50 n.a. Percentage of population that consumes below 40 percent of median consumption 16.20 2.50 n.a. Percentage of population whose income per capita is below US$2 per day 46.60 10.80 n.a. Gini coefficient 0.43 0.28 n.a. Percentage of population living below the poverty line n.a. 20.00 17.00 Percentage of population with running water at home n.a. 50.00 40.00 Source: INSTAT and World Bank, 2002. The food supply and distribution system of Tirana, Albania 45

Table 18. Main agrofood production, 2000–2004

Description Unit 2000 2001 2002 2003 2004 Sausage and ham tonnes 4 055 4 395 5 444 5 893 7 245 Jam and compote tonnes 218 116 369 450 438 Canned vegetables tonnes 105 283 586 683 414 Oil tonnes 2 229 9 748 14 026 21 530 24 528 Milk hl 33 169 46 500 46 325 34 720 25 275 Butter tonnes 440 334 762 467 790 Cheese tonnes 8 404 8 056 10 336 12 055 13 301 Yogurt tonnes 5 310 4 222 6 345 8 600 14 478 Flour tonnes 269 000 270 000 273 391 283 755 286 997 Bread tonnes 198 000 200 000 205 000 211 000 215 000 Noodles tonnes 124 Beer hl 85 837 116 720 154 681 144 042 298 326 Wine hl 7 413 14 228 6 625 9 164 14 024 Other alcoholic drinks hl 28 767 29 681 46 062 39 666 34 123 Soft drinks hl 420 448 369 990 423 069 508 567 661 136 Mineral water hl 386 559 334 064 321 238 469 674 815 903 Cigarettes tonnes 372 126 47 15 15 Tobacco tonnes 2 988 4 013 2 174 2 919 752 Soap tonnes 77 366 164 38 n.a. Source: MAFCP, 2004b.

Table 19. Production of fruits per capita, 2003–2004

Region kg/capita 2003 2004 National average 24.7 27.2 Berat 47.8 56.6 Dibër 40.5 48.6 Durrës 22.1 22.0 Elbasan 19.1 24.0 Fier 20.2 21.0 Gjirokastër 25.1 29.7 Kukës 52.3 60.7 Korçë 36.9 41.3 Lezhë 26.2 33.7 Shkodër 30.1 30.3 Tirana 10.6 10.0 Vlorë 18.0 18.7 Source: MAFCP, 2004b. 46 Annex

Table 20. Supply level, production and imports/exports for the processed fruits and vegetables subsector, 2000–2003 (in kg)

Years Demand Production Imports Exports 2000 13 855 764 323 000 15 091 313 1 558 549 2001 12 398 680 399 000 13 035 229 1 035 549 2002 14 024 591 955 000 14 287 613 1 218 022 2003 11 583 831 1 133 000 11 283 128 832 297 Source: MAFCP, 2004b.

Table 21. Supply level, production and imports/exports for the flour subsector, 2000–2003 (in kg)

Year Demand Production Imports Exports 2000 382 011 770 269 000 000 113 011 770 n.a. 2001 380 164 921 270 000 000 110 196 674 31 753 2002 390 541 894 273 391 000 117 150 894 n.a. 2003 351 764 396 283 755 000 70 763 636 2 754 240 Source: MAFCP, 2004b.

Table 22. Supply level, production and imports/exports for the oil subsector, 2000–2003 (in kg)

Years Demand Production Imports Exports 2000 30 980 067 2 229 000 28 789 196 38 129 2001 43 932 716 9 748 000 34 189 000 4 284 2002 47 681 000 14 026 000 33 655 000 n.a. 2003 56 672 869 21 530 000 35 294 288 151 419 Source: MAFCP, 2004b.

Table 23. Supply level, production, and imports/exports for the soft drinks and fruit juice subsector, 2000–2003 (in litres)

Year Demand Production Imports Exports 2000 47 471 405 42 044 800 12 850 649 7 424 044 2001 50 758 873 36 999 000 15 917 535 2 157 662 2002 1 071 120 618 42 306 900 65 693 403 888 242 2003 70 831 706 50 856 700 20 653 028 678 021 Source: MAFCP, 2004b. The food supply and distribution system of Tirana, Albania 47

Table 24. Domestic production of agro-industry and meat subsector (in million ALL)

2000 2001 2002 2003 Meat derivates production n.a. 1 717.0 2 452.0 2 248.0 Gross value in the agrofood industry 27 834.0 29 994.0 33 914.0 37 699.0 Percentage of the meat subsector n.a. 5.7 7.2 6.0 Source: MAFCP, 2004b.

Table 25. Fresh meat production (in tonnes)

Year Marketa Domestic productsb Imports 2000 69 374 608 68 766 2001 91 727 545 91 182 2002 89 306 623 88 683 2003 83 245 1 776 81 479 a Total market = domestic production + imports (export is not included) b Domestic production is measured by the output levels from the registered butcheries in by part of the animals imported. Source: MAFCP, 2004b.

Table 26. Production price levels, 2002, 2003, 2004 (in ALL/kg)

Product 2002 2003 2004 Variation in percentage Variation in percentage (2002 –2003) (2003–2004)

Fresh cattle meat 487 545 n.a. 11.9 n.a Frozen cattle meat 585 600 544 2.6 -9.3 Fresh pork 221 299 251 35.3 -16.1 Frozen pork n.a. 200 200 0.0 0.0 Goat meat 450 600 n.a. 33.3 n.a. Innards 531 333 521 -37.3 56.5 Fresh poultry 111 145 180 30.6 24.1 Frozen poultry 164 193 117 17.7 -39.4 Cured meats and bacon 490 459 422 -6.3 -8.1 Salami 447 352 330 -21.3 -6.3 Ham 452 400 468 -11.5 17.0 Hamburgers, meatballs 169 201 219 18.9 9.0 Source: MAFCP, 2004b. 48 Annex

Table 27. Production price levels for food processed products, (in ALL), 2002–2003 and their variation (base year 2002)

Products Measurement unit Average price Average price Variation (%) 2002 2003 Processed vegetables and olives kg 120 127 5.83 Salted olives kg 136 161 18.38 Fruit jam kg 120 125 4.17 Marmalade kg 79 103 30.38 Processed fruits kg 114 125 9.65 Fruit juice litre 69 78 13.04 Tomato sauce kg 118 122 3.39 Refined sunflower oil kg 122 120 –1.64 Olive oil kg 288 337 17.02 Flour kg 58 27 –53.45 Source: MAFCP, 2003a and 2004a.